British chancellor upbeat on China economy, backs reforms

British Chancellor George Osborne expressed his confidence in the slowing Chinese economy Sunday, saying the country was going through a necessary transformation and was still a driver of global growth.

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Britain’s Chancellor of the Exchequer George Osborne delivers a speech in Beijing Sunday

China is undergoing a very important economic transformation from an investment-led economy of the past to a consumption-led economy of the future. When that happens, the country is going to find that challenging, Osborne said at the start of a five-day trip to China.

A string of downbeat activity data combined with wild price swings in the stock markets and a surprise currency devaluation in August have fuelled fears that the Chinese economy may be slowing more sharply than was expected earlier, putting Beijing’s 2015 growth target of 7 percent at risk.

China needs transformation which is essential for creating good careers, good jobs and higher living standards for its 1.3 billion people.

“I think the message I would say to China is, carry on with the reform, carry on with the change you’re making,” he said

On Monday he is due to meet senior Chinese leaders in Beijing while on Tuesday he will visit the Shanghai stock exchange, the centre of the summer’s market chaos.

Osborne said he was “very deliberately” visiting the Shanghai stock exchange Tuesday and would be talking about what had happened on the financial markets over the summer.

“Of course there have been ups and downs. We’ve seen that through the summer. In our estimation the spillover effects, the impact of that on other financial markets, has been relatively limited,” he said, speaking to an audience of Chinese technology executives.

“And if you look at the broader picture in China, even if it’s not growing at double digits the way that it once did, it is still creating an economy at least the size of the United Kingdom in the next five years. So it’s a massive source of global growth going forward.”

“There is no economy in the west that is as open to Chinese investment as the United Kingdom,” said Osborne, who is currently frontrunner to succeed Prime Minister David Cameron as Conservative leader ahead of the 2020 election.

“We welcome Chinese investment. There is huge amounts of Chinese investment coming into Britain at the moment. Indeed we are attracting more investment than Germany, France and Italy put together into the UK.”

In an article he wrote in Observer ahead of his China visit, he said UK must be ‘best partner in the west’, and develop financial and cultural links with China.